An instructor is interested in seeing if there is an association between attendance and final grade earned in a freshman level class. He records the number of absences for each student and then whether they pass or fail the class. The results are summarized below.

Construct a 99% confidence interval for the true proportion of students who pass the class Round your sample statistic and confidence limits to three decimal places.
0.
1.
2.

3.

4.

5.

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b. At a 0.01 significance level, can the instructor conclude that there is a relationship between number of absences and whether the student passes or fails the class? (Note: Round expected counts to the nearest whole number)
1.
2.
3.
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Question 1
The minimum wage was first set by the Bake Shop Act, a law passed during the presidency of _____.
Herbert Hoover

Franklin Delano Roosevelt

Richard Nixon

Lyndon Johnson

Question 2
The Supplemental Security Income increased federal support for the _____.
blind

all of these

elderly

disabled

Question 3
The purpose of the Earned Income Tax Credit (EITC) is to help poor people who are _____.

homeless

working

unable to work

unemployed

Question 4
The EITC bonus received by a low-income person:

increases indefinitely as long as their annual income keeps increasing

remains constant as their income increases

decreases as their income increases

increases until it reaches a certain peak ($20,000 maximum)

Question 5
The majority of the assistance the United States government offers to poor people is done through:

job guarantees

cash transfers

in-kind transfers

income tax exemptions

Jeremy earned $270,000 in salary and $8,000 in interest income during the year. Jeremy has two qualifying dependent children who live with him. He qualifies to file as head of household and has $21,000 in itemized deductions. Neither of his dependents qualifies for the child tax credit. (use the tax rate schedules.). (Do not round intermediate calculations. Round "Income tax liability" to 2 decimal places.) MUST USE 2017 TAX RATE !!!!!!!!!!!!!!!!!! ​1) What is Jeremys income tax liability? 2) Assume that in addition to the original facts, Jeremy has a long-term capital gain of $13,000. What is Jeremy’s tax liability including the tax on the capital gain? 3) Assume the original facts except that Jeremy had only $8,000in itemized deductions. What is Jeremy’s total income tax liability?

For both questions, please show what you typed into the TVM solver.

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I:

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Time of month: End or beginning

1. Rachel, who just turned 18, deposits a $15,000 gift into an interest-bearing account earning a 7.5% annual rate of interest. How much will she have in the account when she retires at age 60, assuming all interest is reinvested at the 7.5% rate? If Rachel decided she only needed $300,000 at retirement, could she retire at 59? Explain.

2. James deposited $800 at the end of the past 16 years to purchase his granddaughter, Kali, a car, James earned 8% interest compounded annually on his investment. If the car Kali chooses costs $22,999, would she have enough money in the account to purchase the vehicle? What would be the deficit or surplus?

Name and describe the four types of delivery. Give a comparison between two types (your choice). Of the two Indicate which you think would enable a speaker to be most effective and tell why or why no? State if you feel it is important for a speaker to rehearse the presentation/speech before delivery; if so state why, if not state why not?

In manuscript presentations, speakers read their remarks word for word from a prepared statement. Manuscript speaking is common at annual company meetings, conventions, and press conferences. Unfortunately, few experiences are as boring as the average manuscript presentation. Novice speakers often try to conceal their nervousness at facing a large audience by reading from a script—and turn into lifeless drones when doing so. Because most speakers are not trained at reading aloud, their delivery is halting and jerky. Even worse, a nervous speaker who relies too heavily on a manuscript can make serious mistakes without even knowing it. Management consultant Marilyn Landis describes one

Memorized Presentations

If speaking from a script is bad, trying to memorize that script is even worse. You have probably been subjected to a memorized sales pitch from a telemarketer or door-to-door salesperson. If so, you know that the biggest problem of a memorized presentation—one recited word for word from memory—is that it sounds memorized. Speakers who recite their presentations from memory often fail to incorporate natural nonverbal expressions or demonstrations of emotion in their delivery. As a result, their speeches sound rehearsed to the point of almost being robotic. It might seem that memorizing a presentation would help alleviate your nervousness, but, in fact, memorization almost guarantees that stage fright will become a serious problem. Speakers who devote large amounts of time to simply learning the words of a talk are asking for trouble. During the presentation, they must focus on remembering what comes next instead of getting involved in the meaning of their remarks. It is difficult to recover from forgetting a portion of a memorized speech without the mistake being obvious to the audience.Sometimes it is necessary to memorize parts of a presentation, because referring to notes at a critical moment can diminish your credibility. A salesperson is usually expected to know a product’s major features: how much horsepower it has, how much it costs, or how many copies per minute it delivers. A personnel manager might be expected to know, without referring to a brochure, the value of employee life insurance (if each employee’s benefit is the same) and how much employees contribute to the premium. A coworker would look foolish at a retirement dinner if she said, “Everyone knows about Charlie’s contributions …” and then had to pause to refer to her notes. In such situations, it is recommended to memorize only the essential parts of a presentation

Extemporaneous Presentations

An extemporaneous presentation is planned and rehearsed but not memorized word for word. When you speak extemporaneously, you learn your key points and become familiar with the support you will use to back them up. In other words, you practice the big picture but let the specific words come naturally during your delivery. If you prepare carefully and practice your presentation several times with a friend, a family member, or even a group of coworkers or subordinates, you will have a good chance of delivering an extemporaneous talk that seems spontaneous—and maybe even effortless. Almost every presentation you plan—a sales presentation, a talk at the local high school, a progress report to a management review board, a training lecture, an annual report to employees or the board of directors—should be delivered extemporaneously.

Impromptu Presentations

Sooner or later you will be asked to give an impromptu presentation—an unexpected, off-the-cuff talk. A customer might stop in your office and ask you to describe the new model you will have next spring. At a celebration dinner, you might be asked to “say a few words.” A manager might ask you to “give us some background on the problem” or to “fill us in on your progress.” You may suddenly discover at a weekly meeting that your subordinates are unaware of a process they need to know about to understand the project you are preparing to explain.

Giving an impromptu talk need not be as threatening as it seems. Most of the time, you will be asked to speak about a subject within your expertise—such as a current project, a problem you have solved, or a technical aspect of your training—which means you have thought about the topic before. Another reassuring fact is that most listeners will not expect perfection in unrehearsed remarks.

Your impromptu presentations will be most effective if you follow these guidelines.⁴

I. Lehman Brothers: Subprime Accounting?

Lehman Brothers Holdings Inc. was originally founded in Montgomery, Alabama, in 1850 by three brothers. The company began as a small retailer that took cotton as payment for goods. The company gradually expanded, first into trading cotton, before growing into a giant investment bank. By 2007, the company was the fourth largest investment bank in the United States, recognizing record profits of $4.2 billion. While other companies in the industry were beginning to struggle and show losses, Lehman’s CFO assured investors that the risks posed to Lehman were minimal and would have little impact on the firm’s earnings. However, behind the record profits and executive confidence were a slew of undisclosed liabilities and shaky security valuations. When the company filed for bankruptcy on September 15, 2008, it was the largest bankruptcy in history. To put the size of this collapse into perspective, when WorldCom filed for bankruptcy in 2002, it was the largest in U.S. history, with $41 billion in debt and $107 billion in assets. Lehman Brothers entered bankruptcy with a mind-boggling $618 billion of bank debt alone and hundreds of billions of additional debt, many times the amount of debt of Enron and WorldCom combined. How did such a historic company reach this situation with so little warning?

SUBPRIME LENDING

Lehman’s storied history came from humble beginnings in the cotton trade. In 1899, the company shifted its focus to bringing other companies into the stock markets. In the early 1900s, Lehman Brothers brought such giants as Sears, Roebuck and Company, as well as R.H. Macy & Company and B.F. Goodrich Co. into the public markets. The company thrived through the great depression by focusing on venture capital markets since the public equity markets were in turmoil. The firm remained primarily run by Lehman descendants until 1969. The company continued to grow and in 1984 was acquired by American Express, eventually merging with E.F. Hutton to become the financial giant Shearson Lehman Hutton. It was during the late 1980s when the company began building an aggressive leveraged finance business—a model characterized by primarily debt-based financing. The model can be highly profitable, but increases risk. In 1994, American Express divested its interest and spun off the company in an IPO as Lehman Brothers Holdings Inc. Lehman Brothers Holdings Inc. was a highly profitable company reporting quarterly profits for 55 consecutive quarters after the spinoff, up through March 2008.

However, during this profitable period, Lehman, along with other large investment banks, became involved in subprime lending. Subprime lending is characterized by banks making loans to borrowers who would not traditionally qualify for a loan. In many cases, the loans did not have any protection from declines in collateral value because they were issued without a traditional downpayment. Further, many of the borrowers had either poor credit history, or the loans were issued without any requirement for a credit history. Why would a bank do such a thing? Investor demand drove the subprime lending craze. Investors were hungry for securities that could earn higher rates of returns, so banks would bulk large numbers of loans into portfolios, break the portfolio into different levels of risk, and sell these “mortgage-backed securities” (Mortgage Backed Securities “MBSs”) to investors craving high rates of return. However, many subprime lenders provided default guarantees to investors, and some of the most risky MBS were practically unsaleable. As a result, Lehman Brothers, along with many other large investment banks, was faced with a huge amount of risk—high amounts of debt, mostly with short-term maturities, and illiquid assets with long-term maturities. When the housing market began to collapse in 2007, borrowers walked away from the loans, leaving the banks with massive foreclosure costs and holding the titles to properties with values far less than the amount of the loan.

As a result of the subprime mortgage crisis, nearly all of Lehman Brothers’s competitors showed giant losses in the first quarter of 2008, including a huge $5.1 billion loss for Citigroup. However, CFO Erin Callan reported that Lehman was well protected from the collapse and reported a profit of $489 million. The markets were thrilled, and the price of Lehman Brothers’s stock shot up nearly 50 percent. Behind the scenes, however, Lehman Brothers was also collapsing. How was it able to continue to show profits and report lower levels of leverage than its competitors? The answer was a combination of optimistic valuations and an accounting gimmick that Lehman Brothers coined “Repo 105.”

A SOLUTION: INFLATED ASSET VALUATIONS

The majority of Lehman Brothers’s assets were considered “financial inventory” held for sale, which GAAP requires to be reported at fair market value. In 2007, Lehman Brothers adopted the new FASB standard for determining fair market value. Under ASC 820, assets without observable values are considered to be Level 3 fair values. Level 3 fair values require entities to use their judgment to determine a valuation based on assumptions presumed to be used by the markets. Often, companies use a discounted cash flows approach. As the subprime mortgage crisis ballooned during 2007 and 2008, observable market activity for many of Lehman Brothers’s assets declined, leading to more judgment. Lehman Brothers made many attempts to disclose their methods, however financial markets were reluctant to accept them. David Einhorn, an investor who held short positions betting on the decline in value of Lehman Brothers stated, “Lehman does not provide enough transparency for us to even hazard a guess as to how they have accounted for these items.” Markets were clearly skeptical: By June 2008, Lehman Brothers had a total stock market value of $19.2 billion—more than 25 percent below the reported book value. However, the assets held by Lehman Brothers were so difficult—perhaps impossible—to value that, despite market skepticism and impairment losses far lower than competitors, no one, not even the bankruptcy examiner, had been willing or able to conclude that Lehman Brothers reported unreasonable valuations.

A LESS TRANSPARENT SOLUTION: REPO 105

Lehman Brothers was facing massive amounts of debt and likely realized that unless it reduced its leverage, it would fail. However, the assets were not particularly marketable, so Lehman took full advantage of short-term loans from other big companies. This is known as the repo market, short for “repurchase.” Lehman Brothers would acquire cash on a short-term basis from other companies by selling certain assets, with the understanding and agreement that it would repurchase the assets very quickly. This enabled Lehman Brothers to pay off other short-term debt that was coming due. However, because the “sales” of the assets are accompanied by an agreement to repurchase the assets, GAAP requires that these repurchase agreements be fully disclosed and accounted for as a liability.

Lehman Brothers bypassed these accounting rules by creating the Repo 105 transaction. Unlike typical repo transactions, Lehman Brothers would “sell” assets worth more than the amount of the loan—at least 105 percent of the amount of the loan, hence the name. By doing this, it was able to bypass the repurchase agreement accounting requirements and avoid recognizing the liabilities. In addition, Lehman Brothers made the nontransparent choice of failing to even disclose these agreements anywhere in the financial statements. Through these transactions, Lehman Brothers kept massive amounts of debt out of the financial statements, including more than $50 billion of debt during 2008. No wonder it looked better than its competition!

WHERE WERE THE AUDITORS?

Ernst & Young (EY) spent considerable time auditing the valuation of Lehman Brothers’s assets. EY performed walkthroughs to understand the valuation process, identify the significant classes of transactions, and document the appropriate “what could go wrongs” that could have a material effect on relevant assertions. Further, EY substantively tested the valuations for significant classes of assets. In the end, small changes in underlying assumptions could lead to valuation fluctuations many times materiality, making it nearly impossible to determine that a valuation is unreasonable. EY issued an unqualified opinion for its 2007 audit and did not find anything to indicate the valuations were unreasonable in its 2008 quarterly reviews.

EY audited Lehman Brothers for many years. It was well informed about the company’s accounting policies. In fact, lead engagement partner William Schlich informed Anton R. Valukas, the Examiner in the eventual bankruptcy proceedings, that EY had long been aware of Lehman’s Repo 105 transactions. It did not “approve” the policy but “became comfortable with the Policy for purposes of auditing financial statements.” EY indicated to the Examiner that it concurred with Lehman’s approach, although it did not have an opinion on the use of the transaction to manage the company’s reported debt. Following ASC 860 directly, it would appear that the Repo 105 transactions were accounted for as stated in the standards. However, the lack of disclosure of the transactions appeared far more questionable. In fact, the bankruptcy Examiner concluded that there was sufficient evidence to support the finding of “colorable claims” against EY for failure to meet professional standards related to the lack of disclosure.

THE AFTERMATH

Lehman’s bankruptcy filing in September 2008 triggered a period of intense volatility in the financial markets. Coupled with other economic difficulties, the Dow Jones Industrial Average experienced intra-day ranges of more than 1,000 points and extreme price declines. The components of Lehman Brothers were sold off in bankruptcy to many different companies, and many of the derivative securities owned by Lehman Brothers and other banks were deemed worthless. Lehman emerged from bankruptcy in 2012 but did not return to operations; it merely continued winding down the business. The Lehman Brothers situation is a clear demonstration that the old mantra of “too big to fail” is not universally correct.

As usually happens when companies fail, many lawsuits followed, many taking years to reach settlements. JPMorgan agreed in January 2016 to pay $1.42 billion cash to settle claims that it profited by taking advantage of its close financial relationship with Lehman Brothers—essentially receiving payment for debts just prior to Lehman’s bankruptcy filing. Several other smaller investor lawsuits were settled out of court also.

EY did not admit to any deficiencies in its audits but, nonetheless, settled two separate lawsuits in 2013 and 2015 for $99 million with investors and $10 million with the state of New York.

1. Provide us a very high-level summary of the Issues in the Case Study (Think who, what, where, and when.) (Keep it brief).

Founded in 1837, Cincinnati-based Procter & Gamble has long been one of the world's most international companies. Today P&G is a global colossus in the consumer products business with annual sales in excess of $50 billion, some 54 percent of which are generated outside of the United States. P&G sells more than 300 brandsincluding Ivory soap, Tide, Pampers, IAM pet food, Crisco, and Folgers-to consumers in 160 countries. Historically the strategy at P&G was well established. The company developed new products in Cincinnati and then relied on semiautonomous foreign subsidiaries to manufacture, market, and distribute those products in different nations. In many cases, foreign subsidiaries had their own production facilities and tailored the packaging, brand name, and marketing message to local tastes and preferences. For years this strategy delivered a steady stream of new products and reliable growth in sales and profits. By the 1990s, however, profit growth at P&G was slowing. The essence of the problem was simple; P&G's costs were too high because of extensive duplication of manufacturing, marketing, and administrative facilities in different national subsidiaries. The duplication of assets made sense in the world of the 1960s, when national markets were segmented from each other by barriers to crossborder trade. Products produced in Great Britain, for example, could not be sold economically in Germany due to high tariff duties levied on imports into Germany. By the 1980s, however, barriers to cross-border trade were falling rapidly worldwide and fragmented national markets were merging into larger regional or global markets. Also, the retailers through which P&G distributed its products were growing larger and more global, such as Wal-Mart, Tesco from the United Kingdom, and Carrefour from France. These emerging global retailers were demanding price discounts from P&G. In the 1990s P&G embarked on a major reorganization in an attempt to control its cost structure and recognize the new reality of emerging global markets. The company shut down some 30 manufacturing plants around the globe, laid off 13,000 employees, and concentrated production in fewer plants that could better realize economies of scale and serve regional markets. It wasn't enough! Profit growth remained sluggish so in 1999 P&G launched its second reorganization of the decade. Named "Organization 2005;' the goal was to transform P&G into a truly global company. The company tore up its old organization, which was based on countries and regions, and replaced it with one based on seven self-contained global business units, ranging from baby care to food products. Each business unit was given complete responsibility for generating profits from its products, and for manufacturing, marketing, and product development. Each business unit was told to rationalize production, concentrating it in fewer larger facilities; to try to build global brands wherever possible, thereby eliminating marketing difference between countries; and to accelerate the development and launch of new products. P&G announced that as a result of this initiative, it would close another 10 factories and lay off 15,000 employees, mostly in Europe where there was still extensive duplication of assets. The annual cost savings were estimated to be about $800 million. P&G planned to use the savings to cut prices and increase marketing spending in an effort to gain market share, and thus further lower costs through the attainment of scale economies. This time the strategy seemed to be working. For most of the 2000s P&G reported strong growth in both sales and profits. Significantly, P&G's global competitors, such as Unilever, Kimberly-Clark, and Colgate-Palmolive, were struggling during the same time period. 1. What strategy was Procter & Gamble pursuing when it first entered foreign markets in the period up until the 1980s? 2. Why do you think this strategy became less viable in the 1990s? 3. What strategy does P&G appear to be moving toward? What are the benefits of this strategy? What are the potential risks associated with it?

Sitcom Technology Case

Case Study: Cost Concept and Cost Sheet

Sitcom Technology was founded by two IIT graduates Rehan and Nixit in the year 2016 with the objective of providing IT solutions to various companies. They launched their FinTech start-up after getting funded Rs 25,00,000 by Business Ventures, one of the FinTech Angel investors. This was in the form of a loan at a 12% rate of interest.

Rehan utilized his unused two bedrooms flat in Bannerghatta, Karnataka worth Rs 60,00,000 for the office. Although he could get Rs 20,000 per month as rent for the same in the market, he rented it out to his start-up at Rs 15,000 per month and also decided to waive off the security deposit of Rs 100,0000 (going rate).

The other assets bought for their enterprise were four computers and a server (Rs. 200,000), two printers come scanner (Rs 18,000), two cordless phones & four mobiles (Rs 62,000), modem for wifi and other internet accessories (Rs 6000)and office furniture (Rs 1,70,000). After purchasing the furniture, they realized that Rs 20,000 invested in panel doors couldn’t be used. There was no return or refund for that. With no other option in hand, they sold these doors as scrap for Rs 8,000. Besides these purchases, they also invested Rs 40,000 in annual licenses for a lot of software.

Nixit picked up two of his juniors as Programmer and Visualizer come graphic designer after negotiating heavily on their hourly remuneration of 1,000 per hour on a freelancing basis. Depending on the number of hours invested in the development of a particular software/ERP/IT Solution, they were paid. In the month of April 2019, Sitcom Technology paid them Rs 84,000 for 42 hours of work put in by each one of them.

In addition to these two, a telephone operator and a data entry staff were also hired at Rs 13,000 and Rs 17,000 per month respectively. The monthly expenses of Sitcom Technology in April 2019 were:

In April 2019, Sitcom Technology received two big project orders from a leading private bank and one small programming work outsourced by a major IT company in Electronic City. The work was completed in the same month with all four of them putting in a lot of hours. The revenue generated from these three projects was Rs 4,10,000.

Question: Prepare the cost sheet for April 2019 and calculate the profit generated assuming the depreciation on fixed assets to be 10%.

NOTE- could you please provide me the solution ASAP.

Cash Management at Richmond Corporation

Richmond Corporation was founded 20 years ago by its president, Daniel Richmond. The company originally began as a mail order company but has grown rapidly in recent years, in large part due to its website. Because of the wide geographical dispersion of the company’s customers, it currently employs a lockbox system with collection centers in San Francisco, St. Louis, Atlanta, and Boston.

Steve Dennis, the company’s treasurer, has been examining the current cash collection policies. On average, each lockbox center handles $185,000 in payments each day. The company’s current policy is to invest these payments in short-term marketable securities daily at the collection center banks. Every two weeks the investment accounts are swept and the proceeds are wire-transferred to Richmond’s headquarters in Dallas to meet the company’s payroll. The investment accounts each pay .068 percent per day and the wire transfers cost .20 percent of the amount transferred.

Steve has been approached by Third National Bank, located just outside Dallas, about the possibility of setting up a concentration banking system for Richmond Corp. Third National will accept the lockbox centers’ daily payments via automated clearinghouse (ACH) transfers in lieu of wire transfers. The ACH-transferred funds will not be available for use for one day. Once cleared, the funds will be deposited in a short-term account, which will yield .075 percent per day. Each ACH transfer will cost $200. Daniel has asked Steve to determine which cash management system will be the best for the company. Steve has asked you, his assistant, to answer the following questions:

1.What is Richmond Corporation’s total net cash flowfrom the current lockbox system that is available to meet payroll?

2.Under the terms outlined by Third National Bank, should the company proceed with the concentration banking system?

3.What cost of ACH transfers ^could make the company indifferent between the two systems?

please explain in detail.